WASHINGTON
— The Internal Revenue Service today reminded taxpayers to file their federal
tax returns and pay any taxes they owe by the April 15 deadline.
Aware
that the economic downturn has affected many people, the agency urged taxpayers
in difficult financial situations to file a tax return, pay what they can and
work with the IRS to establish a payment plan that will keep them compliant.
Filing
and Paying on Time Saves Money
The IRS cautioned that there is a failure-to-file
penalty for taxpayers who don’t file their tax returns by April 15 and who
owe taxes. Filing by the deadline allows taxpayers to avoid this penalty, even
if they can’t pay all or some of their taxes by the deadline. Taxpayers who
can’t meet the filing deadline can request an extension of time to file.
However, an extension of time to file is not an extension of time to pay.
Taxpayers
who can’t pay the full amount would still benefit from filing their return
and paying as much as they can by April 15. Interest and failure-to-pay penalties
are due on any unpaid balance and increase the amount that the taxpayer owes.
Members
of the military and some others serving in combat zones, or in support, can wait
until after April 15 to file and pay. As a general rule, those eligible get the
extra time penalty-free and interest-free without having to ask for it. Normally,
the filing and payment deadline is postponed until 180 days after the service
member leaves the combat zone.
Electronic Options
IRS
offers various electronic payment options to taxpayers to make it as easy as possible
to make a full or partial payment with their return.
Taxpayers
can make payments online, by phone using a credit or debit card, or through the
Electronic Federal Tax Payment System. Taxpayers who e-file their return may use
the electronic funds withdrawal option for submitting an electronic payment. They
can e-file before April 15 but schedule their payment for withdrawal on April
15.
Information on these options, including any fees involved,
may be found on this Web site, on the Electronic Payment Options Home Page.
Some
taxpayers who itemize may now deduct the convenience fee charged for paying individual
income taxes with a credit or debit card as a miscellaneous itemized deduction.
The deduction is subject to the 2 percent limit on Form 1040, Schedule A.
Taxpayers
may also pay any taxes owed by check made out to the “United States Treasury”
using Form 1040-V, Payment Voucher, which must be included along with the payment
and tax return. Taxpayers who have already submitted their tax return, but still
need to pay all or some of their taxes, may mail the check to the IRS with Form
1040-V.
Installment Agreements and Online Applications
Taxpayers
who find they can’t make a full payment by the April 15 deadline may consider
applying for an installment agreement.
An installment agreement
allows taxpayers to pay any remaining balance in monthly installments. Taxpayers
who owe $25,000 or less may apply for a payment plan electronically, using the
Online Payment Agreement application. Or they may attach Form 9465, Installment
Agreement Request, to the front of their tax return. Taxpayers must show the amount
of their proposed monthly payment and the date they wish to make their payment
each month. The IRS charges $105 for setting up the agreement or $52 if the payments
are deducted directly from the taxpayer’s bank account ($43 for qualified
lower-income taxpayers).
The IRS will automatically give
taxpayers the low income installment agreement fee if they qualify. The taxpayer
does not have to request it. Taxpayers are required to pay interest plus a late
payment penalty on the unpaid taxes for each month or part of a month after the
due date that the tax is not paid. A taxpayer who does not file the return by
the due date — including extensions — may have to pay a failure-to-file
penalty.
For more information about filing and paying taxes,
visit IRS.gov and choose 1040 Central or refer to the Form 1040 Instructions or
IRSPublication 17, Your Federal Income Tax. Taxpayers can download forms and publications
from IRS.gov or request a free copy by calling toll free 800-TAX-FORM (800-829-3676).
